Where is this Dr. Teeth clip from?

It's odd enough that FYE supposedly sold Muppet Babies DVDs (I thought DVDs were only included with Muppet Babies plush), but there is a Dr. Teeth clip that appears. It looks like it's from the 1980s, but I have no idea where this clip originated. He appears through some kind of circle... It appears to be an illustrated guitar of some kind.

I remember this episode, yeah Dr. Teeth was scene in a Muppet Babies episode. It was kind of strange.
But yeah the FYE commercial is a fake, the announcer doesn't sound professional and the FYE logo isn't properly formatted within the editing.

What episode is this from, I'm just curious myself

Did Jim film that for the Muppet Babies episode or Little Muppet Monsters? I know the adult Muppets in animation form was seen in the Babyland episode which were originally from Little Muppet Monsters so I wasn't sure if that was a bit of a cross over at the time. I noticed they had a block called Little Muppet Monsters and Babies Too or something like that.